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WEEKLY NATURAL GAS REVIEW


 

Reuters reports that U.S. natural gas futures has reached an eight-month high on Tuesday. This new record is based on rising liquefied natural gas (LNG) exports and the continuous fall in output and forecasts for warmer weather and higher air conditioning demand over the next two weeks than previously expected.

Reuters reports that Front-month gas futures rose 7.8 cents, or 3.3%, to settle at $2.417 per million British thermal units, their highest close since Dec. 5.

From the beginning of the month, U.S. LNG exports were on track to rise for the first time since the lock-down. Pipeline gas flowing to the plants climbed to a three-month high of 4.4 billion cubic feet per day (bcfd) so far this month from a 21-month low of 3.3 bcfd in July.

 

 

Reuters reports that Russia's second-biggest oil producer, Lukoil, has recently suspended gas exports to China from its projects in Uzbekistan, a company official told a conference call on Friday, due to weak demand.

After Lukoil was suspended from exporting gas from Russia, has been betting on its gas projects in neighboring Uzbekistan, where it has invested as much as $10 billion in the hope of making returns from exports to China.

Lukoil is barred from exporting the gas it produces in Russia. It sells the bulk of it to state gas company Gazprom, which exports it.

 

Reports say that very high gas supplies mean European gas wholesale prices are unlikely to rise significantly over the peak demand winter months unless the weather is abnormally harsh.

European gas prices reached record lows after a glut of liquefied natural gas (LNG) was experienced in Europe owing to the coronavirus lockdowns and reduced industrial output crushed demand.

The Dutch gas prices (the European benchmark) fell to an all-time low of around 2 euros ($2.4) per megawatt-hour (MWh) in May, while British gas prices hit 8 pence/therm, the lowest since futures started trading in 1997. At the moment Dutch winter gas prices are trading just above 13 euros, while spot prices are just below 10 euros.

 

 

 

 

Following the completion of work on the Georgia Elba Island LNG Plant, Kinder Morgan Inc is seeking the permission of U.S. energy regulators to put in service the 10th and final liquefaction train at its nearly $2 billion Elba Island liquefied natural gas (LNG) export plant in Georgia.

By design, each train has a liquefaction capacity of about 0.3 million tonnes per annum (MTPA) of LNG or 0.04 billion cubic feet per day (bcfd) of natural gas. All 10 trains at the plant will be ready for service by the end of the summer.

Elba, owned up to 51% by units of Kinder Morgan and 49% by EIG Global Energy Partners, has capacity to liquefy about 2.5 MTPA of LNG, equivalent to around 0.350 billion cubic feet per day (bcfd) of natural gas.

Royal Dutch Shell Plc has entered into an operations agreement for a 20-year contract to use the facility.

 

 

 

The Nigerian National Petroleum Corporation (NNPC) on recently announced it would reduce importation of Liquefied Petroleum Gas (LPG) into the country when the 100 million standard cubic feet of gas capacity facility at Oredo flow station in Benin City, Edo State, is commissioned.

The Oredo Integrated Gas Handling Facility (IGHF) project built by the Nigerian Petroleum Development Company (NPDC) is slated for commissioning on October 31, 2020 by President Muhammadu Buhari, according to Mele Kyari, group managing director of the NNPC.

Officials of the NPDC estimate that once the plant comes into operations, importation of LPG into the country will be reduced by about 40%.

 

 

Reuters reports that Mexico’s government wants Sempra Energy to commit to building an additional export facility to help sell off excess natural gas as a bargain for granting the energy infrastructure company a historic export permit, according to three people familiar with the matter.

Recall that IEnova had previously discussed with the government the possibility of installing such a plant in Topolobampo, according to two of the sources. But having to commit before getting the export permit was not part of its plan, they said.

 

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